BTC rose 0.7% to $78,354 after Democrats secured control of both chambers of Congress, reversing a recent downtrend that had brought the cryptocurrency to a six-week low. The political shift renewed market attention on the prospects for crypto-related legislation in Washington.
Post-election price rebound amid institutional selling
Despite the rebound, persistent institutional selling continues to raise doubts about the sustainability of Bitcoin’s upward momentum. The initial market response to the election results was negative, as expectations grew that Democratic control might complicate new cryptocurrency regulations.
However, the selloff quickly reversed. Analysts noted that after investors gained clearer insight into the direction of US policy, confidence returned, lifting BTC from session lows.
Derivatives markets showed a notable increase in activity during the recovery. Paradigm, a crypto options liquidity network, reported that Bitcoin options block trades on election day totaled $660 million, more than double the volume seen the previous day.
Market participants purchased roughly $420 million in call options, while selling calls worth $105 million. This activity indicated a tilt toward positions that could profit if prices rise, though some of the volume likely involved protective hedging strategies.
This surge in derivatives volume contrasts with the late October environment when BTC struggled to maintain levels above $77,000 amid significant withdrawals from exchange-traded funds.
Mini dictionary: Paradigm is a crypto derivatives trading network that facilitates block trading and liquidity for institutional clients across major cryptocurrencies.
ETF outflows highlight institutional pressure
Institutional fund flows remain a challenge for Bitcoin’s current recovery. Data compiled by Farside Investors showed that US spot Bitcoin ETFs experienced $643.2 million in outflows on October 30, $398.6 million on November 2, and $115.6 million on November 3, totaling $1.16 billion across three sessions.
BlackRock’s IBIT, the largest Bitcoin ETF by assets, recorded $95 million in redemptions on Tuesday, a decrease from Monday’s $405.3 million. While this slowdown points to diminished outflow pressure, there is still no clear indication that institutional investors have resumed building positions in BTC.
| Date | Total ETF Outflow | IBIT Outflow |
|---|---|---|
| October 30 | $643.2 million | Not specified |
| November 2 | $398.6 million | Not specified |
| November 3 | $115.6 million | $95 million (Tuesday) |
| November 4 | N/A | $405.3 million (Monday) |
Analysts observed that despite recent negative ETF flows, Bitcoin can stage price rebounds. The immediate focus for digital asset traders is whether BTC can hold above the $78,000 mark in the near term.
Key levels and outlook for Bitcoin price
BTC faces resistance as it approaches $80,000, a psychological barrier for traders. A daily close above this level would shift focus to the 30-day moving average at $81,319, followed by potential movement toward $82,000, a zone identified by digital asset research firm 10x Research and market maker QCP Capital.
Failure to maintain support near $78,000 could send the price lower, exposing Bitcoin to $76,000 and possibly the next line of support at $75,000, while the 200-day moving average sits near $73,200.
Wider financial conditions may also impact BTC’s recovery trajectory. Rising US Treasury yields and technical weakness in technology stocks could act as additional headwinds for further gains.
Paradigm estimated $660 million in Bitcoin options block trades on election day, more than double the previous session’s activity, indicating heightened derivatives interest as prices recovered from session lows.
